Redefining Global Trading With Digital End-To-End Platforms
This article was originally posted in the Digital Coffee Future magazine.
Buying coffee internationally is fraught with complexities, risks and inefficiencies at every stage of the supply chain. According to the World Economic Forum, reducing barriers within international supply chains could increase global trade by 15% and global GDP by nearly 5%, boosting economies and creating jobs worldwide.
Meanwhile, the growth of e-commerce has exponentially increased retail businesses’ reach via marketplaces like Amazon, Alibaba, Walmart and beyond. These sites offer an open digital end-to-end marketplace to facilitate business from the first point of sale to its final delivery. These same digital tools can greatly enhance the participation in international coffee trading at all levels of the coffee supply chain – helping roasters, producers, exporters, logistics providers and more, by connecting everyone in one centralized place. New York-based value chain management platform CropConex has entered this space by launching its own digital end-to-end marketplace to “empower buyers, sellers, and exporters to grow together, by making value chains traceable, efficient and accessible.”
Creating a diverse open marketplace of coffee offerings
While we are familiar with which regions of the world produce coffee and what kinds of varieties, it remains largely unclear how coffee producers connect with their potential buyers and vice versa. Let’s take a look at coffee crops traded between Ethiopia and the United States as an example. Heirloom Ethiopian coffees remain highly desirable for their unique traits of florality and fruits especially across the booming specialty coffee market in the United States. However, the stakeholders along the supply chain are fragmented. According to the National Coffee Association, from harvest, coffee has to first change hands from over 2 million coffee farmers in Ethiopia to over 3,000 cooperatives, and then ownership is transferred to over 500 exporters, finally making it to the United States via 80-100 importers who service around 2,400 coffee roasteries.
To streamline these complexities, a digital ecosystem can serve as a solution to creating greater accessibility and connection between all parties. Post harvest season, sellers can create their listings digitally, receiving third-party quality-certified information data provided to their lots, and build a profile showcasing their story and offerings to present to potential buyers. Coffee buyers today often receive samples that may not be tailored to exactly what they’re in the market for, but with this new technology they have the autonomy to find precisely the coffees they need.
Third party quality information about each coffee can provide extra value and credibility to each product. For example, grades, scores and notes on the CropConex marketplace are provided by Co Qua, the second ever CQI-certified coffee scoring laboratory in Ethiopia. An open marketplace with validated listings can build greater confidence in direct trade participation across different sizes and levels of experience in both buyers and sellers.
Optimizing the search for the coffee you need, can afford, or want to taste
In this organized system, the catalog of what coffees are available to buyers becomes more diverse, going beyond a list or a spreadsheet of what’s in stock. Regular inventory updates enable both sellers and buyers to gain an accurate reading of each coffee’s real time availability, while digital categorization allows for advanced filtering when you shop.
On CropConex, coffee buyers can search by newest or oldest listings, popularity, price point, cup profile, and quality metrics, which provides a bevy of benefits. Instead of waiting on these key pieces of information that dictate purchasing decisions to be transferred via questions and answers along each member of the supply chain, this data is centralized in digital product listings.
When a buyer orders a coffee sample, the seller receives a notification that they have an interested buyer. Upon receiving, sample roasting and completing a sensory analysis of the coffee, the buyer returns value to the seller by sharing helpful information about how their coffee is being perceived in the buyers market in just a few days. This open communication system encourages relationship trading. “[CropConex] really just opens up avenues for collaboration and connection globally, which is a fascinating opportunity,” says Kyle Ramage, co-founder of Black and White Roasters in North Carolina, USA and one of CropConex’s first clients.
Technology splits the distance and time needed for logistics and compliance
The countries of Ethiopia and the United States are roughly separated by 13,158 kilometers (8,176 miles) which translates to 21 days via nautical travel or 14 hours by plane. The distance presents a massive logistical challenge that currently results in a majority of Ethiopian coffee being transported to the United States via sea freight. CropConex established commercial airline partnerships to tap into the efficiency of air transportation, offering new levels of affordability in rates starting at $1.30/lb and under. By using already existing flight routes, CropConex capitalizes on open and underutilized freight spaces rather than expanding new freight pathways.
There are also multiple regulatory governing bodies at play in preparing coffee for export from Ethiopia or import into the United States. CropConex worked with the Ministry of Trade and Regional Integration offices, the Coffee and Tea Authority, the Ministry of Innovation and Technology, and the Ethiopian Investment Commissioner to finalize the legal incorporation of e-commerce into their business registration codes. On November 11, 2022 CropConex was licensed as the first E-Commerce Platform Operator business in the nation.
Securing contract terms at the point of purchase that include banking, international and domestic freight logistics, as well as warehousing into one platform reduces and removes multiple levels of risk a buyer normally faces. In return, the importers, exporters, logistics providers, and producers receive their dividends in a timely fashion. “Ubuntu is the African concept of common humanity, oneness, you and me both. It’s a concept in which your sense of self is shaped by your relationships with other people, and at the heart of what we do at CropConex,” says founder Brianna Dickey. “We wish to tap into our collective right to opportunity and prosperity by reverse engineering sustainable economic development.”
